Investing

CAGR Calculator

Convert total investment growth into an annualized return for easier comparison.

About the CAGR calculator

Compound Annual Growth Rate (CAGR) converts an investment's total growth into a single annualized rate. It answers a precise question: what steady yearly return would take the starting value to the ending value over the same period?

Use it to compare mutual funds, PMS portfolios, listed stocks, gold, real estate, or private investments across different holding periods. CAGR is more useful than absolute return when two investments were held for unequal durations.

The calculation is a simplification. It assumes no intermediate cash flows and smooths volatility into one rate, so it should not be used for SIPs, staggered purchases, withdrawals, or portfolios with material interim additions.

How do I use the CAGR calculator?

  1. Enter the initial value: Add the amount invested or the portfolio value at the start of the measurement period.
  2. Enter the final value: Add the ending value after all market movement and reinvested gains for the period.
  3. Set the time period: Enter the number of years between the start and end values. Use the same dates when comparing two investments.
  4. Read the annualized return: The CAGR shows the smoothed annual rate. The calculator also shows absolute gain and total return percentage for context.
  5. Use XIRR when cash flows exist: If you added money, withdrew money, or received irregular cash flows during the period, CAGR is not enough. Use XIRR for that case.

How is CAGR calculated?

CAGR = [(FV / PV)^(1 / n) − 1] × 100

Absolute return is calculated separately as FV − PV, and total return percent is (FV − PV) ÷ PV × 100.